You are looking to open a trading account and deposit your money or you have received a random call to open an account.
Ask questions to the broker and to yourself!
Is the broker regulated? – Don’t proceed your money is not protected.
If yes, which regulatory body has authorised the license?
Is the broker offering a cash bonus for opening an account? This is not allowed for UK & EU retail clients.
Is the broker offering automatic trades or signals to guarantee profits? Nothing is guaranteed in life, stay away!
Can you find any credible information about the broker on its website or the public domain, such as company filings, financials, headquarters details, directors etc?
How do I know what regulatory bodies are reliable?
Online brokers that are regulated in an established financial hub are always more trustworthy. Brokers in emerging hubs can also be trustworthy, but caution is warranted. On a regular basis, the company will need to share information and get requested to submit detailed filings.
Always check a broker where they are regulated and ask for their registration details Visit the website of the regulatory body if the company is still authorised to operate.
- FCA Regulated – Financial Conduct Authority – United Kingdom – +++
- CySEC Regulated – Cyprus Securities & Exchange Commission – Cyprus ++
- ASIC Regulated – Australian Securities & Investment Commission – Australia ++
- SFC Authorized – Securities Futures Commission – Hong Kong ++
- FINMA Authorized – Swiss Financial Market Supervisory Authority – Switzerland ++
- FMA Authorized – Financial Markets Authority – New Zealand ++
In conclusion
Always check with the governing body that regulates the broker you are looking at. You can go to the website of the governing body to search for the registration number and verify its legitimacy.
Be First to Comment